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Is Bitcoin (BTC) heading towards a sustained bullish price momentum this week? Not according to James Check – lead on-chain analyst at Glassnode.
Bitcoin hit $44,400 on Tuesday, marking a new yearly high, up 16.5% from the previous week. Despite his long-term optimism on the asset, Check predicts that Bitcoin will consolidate or correct in the near term.
Check stated in a tweet on Tuesday, “I’d be surprised if Bitcoin didn’t consolidate / correct near term.”
He continued by saying, “A few months rest would allow investor cost bases to re-acclimate above the True Market Mean Price.”
The True Market Mean Price is a Glassnode metric that gauges the average price at which BTC investors have acquired their coins, based on blockchain data.
As of Monday, the mean price stood at $31,454, which is roughly 25% below the current exchange rate.
BTC Price (USD) VS True Market Mean Price. Source: Glassnode
The exchange rate broke above the market mean starting on October 23, amid ongoing negotiations between BlackRock and U.S. regulators over their Bitcoin spot ETF application.
According to Check, a scenario in which BTC spikes consolidates between $35,000 and $50,000 until the halving is “very possible.” In the meantime, he predicts the price might spike to $55,000 on ETF excitement before retracing back to $42,000.
Check noted that for every Bitcoin currently mined, roughly 2.5 coins are being removed from circulation into “hodler wallets.”
He also pointed out that the upcoming Bitcoin halving will theoretically double this ratio, as the number of daily BTC mined will be cut by 50%, which is expected to be a catalyst for higher BTC prices.
It’s also a turning point for the BTC mining industry, which loses half of its revenue upon the halving taking place. This usually forces less efficient miners to capitulate while stronger miners remain and reap the rewards of BTC’s future appreciation. Read More rnrn